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RC2 Sales, Income Up, Margin Down

Playthings Staff -- Gifts and Dec, 2/18/2011 4:31:15 PM

Major toy brand RC2 Corp. reported net income for the fourth quarter of 2010 of $10.1 million, up from $8.3 million in fourth quarter 2009.
Net sales for the fourth quarter of 2010 increased by 2.3 percent to $124.2 million compared with net sales of $121.3 million for the fourth quarter a year ago. Selling, general and administrative expenses decreased to $36.6 million, or 29.5 percent of net sales, in the fourth quarter 2010, compared with $40.9 million, or 33.7 percent of net sales, in the fourth quarter 2009. However, 2010 fourth quarter gross margin decreased to 41.9 percent, compared with 45.4 percent in the prior year fourth quarter, primarily due to higher product cost and unfavorable sales mix, as well as increased retail promotional allowances and higher transportation costs. Operating income increased to $14.8 million in the fourth quarter 2010, from $11.7 million in the fourth quarter 2009.

Curt Stoelting, CEO of RC2, said in a statement, "Fourth quarter sales reflected strong organic growth in our continuing preschool, youth and adult products category, contributions in the mother, infant and toddler products category from our recent JJ Cole Collections acquisition and continued expansion in international markets."

The company's preliminary outlook for diluted earnings per share for full year 2011 ranges from $1.80 to $1.95.

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